What not to do when you end someone's employment

Have a valid reason

An unfair dismissal claim is decided under s 387 of the Fair Work Act 2009 (Cth). The first thing the Fair Work Commission asks is whether there was a valid reason for the dismissal related to the employee's capacity (their ability to do the job) or their conduct. A valid reason is one that is sound, defensible and well founded, not capricious or spiteful.

Conduct can be enough. In Kolodka v Virgin Australia Airlines Pty Ltd [2012] FWA 7828, Deputy President Smith found a valid reason related to an employee's behaviour towards others and dismissed his claim. Capacity can be enough too. In Harte v Forbes Australia Pty Ltd [2011] FWA 6948, a service supervisor injured in a workplace accident could no longer do the on-site work his job required. Commissioner Bissett found that was a valid reason, noting the employer had also offered him another role, and dismissed the claim.

A valid reason does not settle everything. The Commission looks at the whole process, and a sound reason can still end in an unfair dismissal if the way it was handled was harsh.

Tell them why, let them answer, and allow a support person

Section 387 also asks whether the employee was told the reason before the decision was made, whether they had a real chance to respond, and whether the employer unreasonably refused to let them have a support person present at discussions about the dismissal.

In Dewson v Boom Logistics Ltd [2012] FWA 9027, a worker was called into a meeting about serious allegations, including assault. When he understood the allegations were about him, he asked for a union official to attend. The manager refused and named a different support person. Commissioner Cambridge found the employer had not proved the assaults, that the manager had pre-judged the matter and ambushed the worker, and that it had unreasonably refused him a support person of his choice. The dismissal was unfair, though reinstatement was refused and compensation was left for a later hearing.

Do it in person, and be consistent

In Wallace v AFS Security 24/7 Pty Ltd [2019] FWC 4292, a small security business ended a casual guard's employment of about two years by text message, without giving a reason. Commissioner Cambridge said dismissal should not be made by text message or other electronic communication unless there is a genuine fear of violence or a geographical obstacle, and that 'basic human dignity requires that dismissal be conveyed personally'. The dismissal was unfair and the guard was awarded $12,465 (gross) compensation.

The Commission can also consider any other relevant matter, including whether others who did the same thing kept their jobs. Treating one person more harshly than others, without a good reason for the difference, can make a dismissal unfair.

Never dismiss for an unlawful reason

The general protections in Part 3-1 of the Fair Work Act forbid dismissing someone because they have a workplace right or exercised one (such as making a complaint or taking leave), because of industrial activity, or because of a protected attribute (s 351). Those attributes are race, colour, sex, sexual orientation, breastfeeding, gender identity, intersex status, age, physical or mental disability, marital status, family or carer's responsibilities, being subject to family and domestic violence, pregnancy, religion, political opinion, national extraction or social origin.

In Sagona v R & C Piccoli Investments Pty Ltd [2014] FCCA 875, an employee of more than 12 years in a family photography business, by then working as a photographer, was found to have been forced to resign after she became pregnant. Judge Whelan of the Federal Circuit Court found the business contravened s 351 (pregnancy) and s 340 (her workplace right to refuse unreasonable extra hours). It was ordered to pay her $174,097 compensation, and penalties of $45,000 against the company and $8,000 against each of its two owners were ordered to be paid to her. Unlike an unfair dismissal claim, there is no cap on compensation, and the people involved can be personally liable.

The practical end: a witness, property and final pay

Two steps are not legal requirements but are good practice. Have a second person, such as someone from HR or another manager, at the meeting, so there is a witness to what was said. And arrange the return of keys, phones, laptops and other property at the meeting or soon after.

Final pay is a legal requirement. It includes wages for hours worked (with penalty rates and allowances), any untaken annual leave (with leave loading if the award or agreement provides for it), and, depending on the case, notice or payment in lieu under s 117, redundancy pay and long service leave. Most modern awards require final pay within 7 days after employment ends. Deliberately underpaying an employee has been a criminal offence since 1 January 2025.

If you are an employer planning a dismissal, it is worth getting advice before the meeting, not after the claim arrives. If you are an employee who has been dismissed, an unfair dismissal or general protections dismissal claim must be lodged within 21 days.